The following are common audit procedures for tests of sales and cash receipts:
1. Compare the quantity and description of items on duplicate sales invoices with related shipping documents.
2. Trace recorded cash receipts in the accounts receivable master file to the cash receipts journal and compare the customer name, date, and amount of each one.
3. Examine duplicate sales invoices for an indication that unit selling prices were compared to the approved price list.
4. Examine duplicate sales invoices to determine whether the account classification for sales has been included on the document.
5. Examine the sales journal for related-party transactions, notes receivable, and other unusual items.
6. Select a sample of customer orders and trace the document to related shipping documents, sales invoices, and the accounts receivable master file for comparison of name, date, and amount.
7. Perform a proof of cash receipts.
8. Examine a sample of remittance advices for approval of cash discounts.
9. Account for a numerical sequence of remittance advices and determine whether there is a cross-reference mark for each one, indicating that it has been recorded in the cash receipts journal.
a. Identify whether each audit procedure is a test of control or substantive test of transactions.
b. State which transaction-related audit objective(s) each of the audit procedures fulfills.
c. For each test of control in part a, state a substantive test that could be used to determine whether there was a monetary misstatement.
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